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Question
Fixed cost is a cost which ______.
Options
Changes in total in proportion to changes in output.
Is partly fixed and partly variable in relation to output.
Does not change during a given period of time.
Remains same for each unit of output.
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Solution
Fixed cost is a cost which Does not change during a given period of time.
Explanation:
Fixed costs stay constant overall, regardless of the degree of output or production within a given range. Examples include rent, salary, and insurance. These costs do not vary with production volume.
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RELATED QUESTIONS
Which of the following cost is time based?
It refers to the expenses incurred on those items which are not directly chargeable to production. Salaries of timekeeper, foremen and watchmen are examples of this cost. This cost is incurred for the concern as a whole rather than a particular product.
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Explain with an example, the meaning of variable costs.
Write short notes on Variable Costs.
